Senior BOK official suggests extension of retirement age for new parents
A senior official of the Bank of Korea (BOK) floated the idea of extending the retirement age for young couples having children, a combination of a politically and generationally divisive issue and the biggest risk factor that threatens the survival of the country.
Lee Jae-hwa, deputy director general of human resources, said the idea would reduce late-in-life financial burdens on parents for whom getting married and having children tends to come much later than for previous generations. The suggestion was made in a column published in the February issue of the central bank’s monthly newsletter, a short piece he penned to share the troubles of those who became parents at not-so-young ages.
“There is a couple I know,” he said. “They got married when the husband was 41 and the wife 37.”
They had a baby girl in 2022 after trying to have a baby for five years.
“The father is 48 and the mother is 44. They are parents of a 2-yearold.”
This is not a rare case anymore, since more people enter the workforce later and get married later.
The single largest factor in a couple’s decision to have a child is whether they would take on the financial responsibilities, especially more so if they should after retirement, he said.
The age of university graduates starting their careers averaged 27.3 years for women and 30 years for men in 2021, according to a survey by Job Korea, a job market portal.
This means in his view that parents who retire before the age of 60 still may have to support their children fresh out of university who have yet to land a job.
“Many who retire much earlier than 60 would certainly want to work to make sure their children are financially independent, a concern that takes priority over their own post-retirement well-being,” he said.
Korea should look to the U.S. and the U.K. where the retirement age cap was removed.
The two advanced economies do not mandate the retirement of older workers on the basis of age.
But their labor market structures are vastly different from Korea where laying off workers is virtually impossible. This concerns issues of overall productivity and labor market duality — a topic for a whole other discussion.
“The issue needs a social consensus. It is a divisive one, but I am happy to add to the conversation of productivity and sustainability,” the deputy director said.
Lee recalled an intense standoff between carmaking labor union members and young workers over the former’s move seeking legislation to extend the retirement age. The younger group protested, citing chronic youth jobless rates.
“I am cautiously optimistic that my idea could resolve inter-generational conflicts with differing interests.”
Many who retire much earlier than 60 would certainly want to work
to make sure their children are financially independent.